Oct. 30 (Bloomberg) -- Alaska North Slope crude weakened
relative to Brent on the spot market as West Coast refineries
bring more oil in by rail, reducing demand for other supplies.

ANS, a medium-density, high-sulfur crude produced off
Alaska’s Arctic Coast, weakened by $1.49 to a discount of $5.60
a barrel to Dated Brent at 3:55 p.m., according to data compiled
by Bloomberg.

About 524,000 barrels a day of ANS crude have been produced
this month. Supplies are sent by pipeline to the Valdez Marine
Terminal in south Alaska, where it’s delivered by tanker to U.S.
West Coast refineries.

Refineries have been boosting supplies by rail from the
middle of the U.S., where prices are cheaper. California railed
in 1.39 million barrels over the first six months of the year,
compared with 413,000 over that period in 2012, according to the
state’s Energy Commission.

Phillips 66 received permits to build a 30,000-barrels-a-day rail unloading facility at its Ferndale, Washington,
refinery, the company said in its third-quarter earnings
statement.

“Between what ourselves and others are doing on the West
Coast, we’re going to pressure ANS prices until ANS, rather than
being a Brent-based type crude, it becomes an advantaged
crude,” Greg Garland, Phillips 66’s chief executive officer,
said during a conference call today.

Bakken crude from North Dakota fits well at Phillips 66’s
Ferndale plant and the Rodeo refining complex in northern
California, Tim Taylor, executive vice president of commercial,
transportation, business development and marketing, said in an
interview after the call. Heavy Canadian crude, transported by
rail, could be a direct substitution for heavy crudes on the
West Coast, he said.

“The focus is really about which crudes make the most
sense economically,” he said. “That’s really the way we’re
trying to drive value, to bring inland crudes to the West
Coast.”